Fintech Update, 7/17 - 7/24
July 17-24, 2017
Leading Off
Acting OCC Comptroller Keith Noreika defended the wisdom of, and ability for the agency to offer, its proposed “fintech charter”; the Federal Reserve’s Faster Payments Taskforce released a set of 10 recommendations to improve the U.S. payments system; PayPal established new partnerships with Chase and Citi; and Swedish e-commerce startup Klarna raised over $200 million in new financing.
In the News
OCC defends “fintech charter.” Acting Comptroller Keith Noreika expressed support for offering limited purpose national bank charters to fintech firms, saying that such companies would be “better supervised” under a national charter. Noreika also challenged legal challenges from state regulators, saying the OCC is “developing its litigation . . . and plans to defend [its] authority.”
Representatives introduce financial inclusion bill. House Financial Services Vice Chairman Patrick McHenry (R-NC) and Congressman Gregory Meeks (D-NY) introduced a new law “to restore consistency to our nation’s lending laws” following the United States Court of Appeals for the Second Circuit's decision in the Madden v. Midland Funding case. The fintech bill “reaffirms...federal banking laws that preempts a loan’s interest as valid when made.”
Fed task force recommends changes for faster payments. The Federal Reserve’s Faster Payments Taskforce, a group of over 300 industry stakeholders established in 2015, published the second part of its final report [full text], featuring a plan to “deliver a safe, ubiquitous, faster payments system in the United States within just three years.”
PayPal partners with Chase and Citi. The payments firm struck two deals: Chase customers will now be able to add their cards to PayPal directly from Chase portals, use their cards in the PayPal digital wallet, and use reward points to make purchases via PayPal; and Citi’s ThankYou Rewards cardholders can now redeem their points at merchants that accept PayPal.
CoinDash says $7M stolen during ICO. The Israeli blockchain startup alleged that its website was hacked during an initial coin offering (ICO) last week. CoinDash said that the digital address to which investments were meant to be sent was changed to a fraudulent one. According to Bloomberg, investors in the ICO lost nearly $7 million.
Delaware amends state law to account for blockchain. Delaware’s House of Representatives recently approved amendments to the state’s law that “make explicit the right to trade stocks on a blockchain.” Now, the Delaware Blockchain Initiative has published a fact sheet, outlining why a firm might want to consider registering issuances and transfers of shares in blockchain.
Klarna raises over $200M in new financing. The Swedish e-commerce and payments firm picked up a new investment, valued between $225-250 million, from private equity firm Permira in exchange for 10% of the business. As a result of the investment, Klarna is now valued at approximated $2.5 billion and has raised nearly $500 million in the past two months.
Tomorrow wants to help millennials plan for their deaths. The newly launched firm, which is entirely app-based, aims to help millennials plan ahead by helping with products like life insurance, trust funds, and wills. According to the company, 74% of U.S. millennials don't have a will, and half of millennial households would struggle to pay bills without their primary earner.
ASIC Chairman shares thoughts on ICOs, blockchain. Greg Medcraft, Chairman of the Australian Securities and Investments Commission (ASIC), said that he and other global securities regulators are monitoring the rapid rise of initial coin offerings (ICO), public sales offerings in which blockchain contracts are sold to investors as a means of fundraising early-stage companies.
Have a great week!
The Fintech Update Team